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FTC opposes big Pennsylvania system merger


The Federal Trade Commission  seeks  to block Penn State Hershey Medical Center’s proposed merger with PinnacleHealth System, asserting that the new central Pennsylvania  entity would raise prices and lower healthcare quality in the area.

“The proposed merger would eliminate the significant competition between these hospitals {hospital systems} resulting in higher prices and diminished quality,” said Debbie Feinstein, director of the FTC’s Bureau of Competition.

PinnacleHealth and Penn State Hershey responded by saying:

“We are extremely disappointed that the FTC does not share the enthusiasm of the many employers, community leaders, private physicians, commercial insurance providers and others who have recognized the benefits of our integration and demonstrated their broad support for it.”

The systems have asserted that the proposed merger would create “the depth of services and scale” needed to manage population health at the lowest possible cost.

But  hospital mergers have tended to be associated with higher prices in their regions as a result of less competition.

The FTC’s decision displays its continuing skepticism and frequent opposition to  hospital mergers, especially since 2007.

Deals that would give systems more than 40 percent of the market share  in their regions tend to ignite the agency’s opposition.

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